I’ve taken graduate level economics courses. The problem we have is too many people have learned about comparative advantage but they don’t remember the exceptions to the argument for trade that are usually taught with them.
A tariff won’t increase the price of the US produced product if the U.S. produces enough to meet the US need, and if there is competition within the US market.
If the U.S. can’t produce enough to meet the need, then prices will rise causing more US product to meet the demand. If necessary it will rise up to the tariffed price.
What Trump has thrown around is a 25 to 30% Tariff. And he hasn’t mentioned tariffing oil at all. But if he did, we are talking about less than $10 a barrel.
Imports are equal to 16% of our GNP. So if you tariffed all imports at 25%, The worst case is that you’d see a one time inflation of about 3.4%. (.25 Tariff * 16% Imports)/ (16% IMPORTS + 100% GNP).
Agreed. Don't tell central.
Imports are equal to 16% of our GNP. So if you tariffed all imports at 25%, The worst case is that you’d see a one time inflation of about 3.4%.
3.4%, plus the increased cost of the US products.